Scientific Games Sells Betting Product to Endeavor for $1.2 Billion
Global sports and entertainment company Endeavor, the parent company of sports agency IMG and owner of the UFC, has agreed to buy the sports betting business of Scientific Games for $1.2 billion.
Scientific Games’ OpenBet product produces the back end technology for sportsbooks, making money off monthly licensing fees and taking a piece of a sportsbook’s net revenue. OpenBet has most of its business overseas, but has scored 24 sportsbooks in 12 states in the United States, including parts of FanDuel, WynnBET, and Betfred.
Endeavor president Mark Shapiro told The Action Network that the synergies with its IMG brand — IMG Arena and IMG Media — makes the acquisition a no-brainer.
“We’re already managing relationships with the ATP, the PGA Tour, down to cricket and volleyball, with high margin returns,” Shapiro said. “And every sports fan in these emerging markets wants to place a wager. We’ll do this in Japan and Asia and Africa and crush in those territories. The good thing is we have boots on the ground in over 50 countries.”
OpenBet will allow Endeavor to add to rights packages that they are brokering for future tournaments.
“We’re in the strongest areas of where the tailwinds are,” Shapiro said. “Content and betting. It’s like we are leading off and hitting cleanup.”
Scientific Games stock popped 4.8% in after hours trading on the news.
Whether OpenBet will be successful under Endeavor has a lot to do with how much the business will change. FanDuel, the number one sportsbook in the US, uses the Scientific Games platform, while the No. 2 DraftKings migrated from competitor Kambi’s platform to its own.
BetMGM, which is in the No. 3 position, uses IGT for its backend. Caesars Sportsbook, which has been spending big money over the past couple of months to grow market share, also used Scientific Games’ product.
OpenBet’s platform is especially successful in Europe where there are small sportsbooks that can’t build platforms by themselves, but do good business because the locals want to bet with the local name. It’s harder to build a business like that in the United States, as the big names have ruled the industry so far.